What is happening at Paragon?

Paragon is the UK's third biggest buy-to-let mortgage lender, but the bank does not take deposits, so no savers are at risk of losing their money.

But I have a mortgage with Paragon. What will happen now?

It is unlikely that your mortgage deal will change in the next few months, or if you have a fixed-term deal, until the end of the fixed period.

Will I have to pay more for the mortgages on my investment properties?

There is a chance that if Paragon can not get through its current difficulties that it may increase its mortgage rates, but customers can re-mortgage with a rival lender to get a more competitive deal.

What should I do with my Paragon shares?

City experts said risk-averse investors would be wise to sell their Paragon shares. They said the outlook for buy-to-let lenders looked "very unattractive" and one added: "The market is becoming increasingly sceptical about Paragon;'s ability to fund its operations in current market conditions."

What is happening at Northern Rock?

It has received a number of takeover proposals but says these were “materially below” its market value. None of the bidders has made an offer for its entire busines. The value of Northern Rock’s shares fell by 21.42 per cent yesterday, to 104.2p. In February its shares were worth £12.22 each

Will the Government have a say in who buys it?

The Treasury, the Financial Services Authority and the Bank of England – the tripartite that oversees Britain’s financial stability – are monitoring the sale process. The Government has said that it will back the deal that requires the least public sector funding, and which causes the least problems for Northern Rock’s customers.

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